“Most consumers don’t understand how pervasive GMO ingredients are in this country in restaurants and supermarkets,” said Steve Ells, chairman and co-CEO, during a July 18 call with financial analysts to discuss quarterly earnings. “But the fact is that 94 percent of the soybeans and 88 percent of the corn in this country are genetically modified. At Chipotle, while most of our ingredients are already GMO-free, we are committed to accomplishing the difficult mission of removing all GMO ingredients from our food.”
The fast-casual burrito chain has shifted from soybean oil to non-bioengineered sunflower oil to cook its chips and crispy taco shells. Additionally, the soybean oil used in the chicken and steak marinade has been replaced with non-bioengineered rice bran oil.
“These are important steps for us in moving away from genetically modified ingredients altogether,” Ells said. “And there will be significant further progress in the coming months.”
But that progress comes at a cost. The company said it would raise prices of some of its menu items in part to accommodate its transition to non-bioengineered ingredients.
“We don’t necessarily think that customers are going to want to pay more or going to visit more often,” Ells said. “But all along the way on our ‘food with integrity’ journey, we have always done things that we thought were the right things to increase the quality of our food that was going to be more wholesome, more helpful and more respectful to the environment, and we think GMOs follows along that same thinking. And we think over time, as our customers discover more about where their food comes from and as they discover more about what Chipotle is doing to source these higher-quality ingredients, we think that does build customer loyalty. But it is hard to say that there is a direct correlation between removing GMOs and people paying more or visiting more.”
The 20-year-old company also recently launched vegetarian Sofritas, non-bioengineered seasoned and shredded tofu, in California markets.
“We are pleased with Sofritas, both in terms of the taste and how they are being received by customers,” Ells said. “As of now, Sofritas account for between 4 percent and 5 percent of our product mix in California. That percentage was higher at the time of the launch, when there was significant marketing support, and we think it will creep back up in time as we gain wider acceptance, since many people are still unfamiliar with the idea of a tofu entrée at Chipotle.”
The company plans to expand its Sofritas test to restaurants in the Pacific Northwest in July and is considering adding markets in the fall as more tofu becomes available.
“We haven’t seen this yet, but it is my hope that we will get more people who might not have thought about eating at fast-food restaurants who might be vegan or vegetarian or just health-conscious in general to maybe come and try us and learn that this is a new kind of fast food,” Ells said.
